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10/21/2014
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Lean – Why and How?
Copyright © Ceptara Corp. | LEAN – Why and How | Printed on: 21 October 2014 | Slide 1
LEAN WHY & HOW?Why is Lean important & how does it work?
Chris Lindstrom, Ceptara Corp.
Lean – Why and How?
Copyright © Ceptara Corp. | LEAN – Why and How | Printed on: 21 October 2014 | Slide 2
Lean - 5S Exercise
• In consecutive order, i.e. 1 to 50, find each number and
record how long it took to discover all 50 numbers.
1. Start the timer
2. Circle 1, 2, 3, 4, … 50
3. Stop the timer
4. Write down how long it took in minutes & seconds
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Lean – Why and How?
Copyright © Ceptara Corp. | LEAN – Why and How | Printed on: 21 October 2014 | Slide 3
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Circle each number in ascending (1, 2, 3, …50)
order, record how long it takes.
Lean – Why and How?
Copyright © Ceptara Corp. | LEAN – Why and How | Printed on: 21 October 2014 | Slide 4
1 2 3 4 5 6 7 8 9 10
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Circle each number in ascending (1, 2, 3, …50)
order, record how long it takes.
Lean 5S Methodology— Sort, Straighten, Shine, Standardize, Sustain
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Lean – Why and How?
Copyright © Ceptara Corp. | LEAN – Why and How | Printed on: 21 October 2014 | Slide 5
Chris LindstromManaging Partner, Ceptara Corp.
• Ceptara, established in 2002 Helps organizations bring excellence into
focus through management consulting, business coaching, quality training and productivity tools utilizing the Lean Six Sigma toolbox.
• Experience Over 20 years of management experience
with technology companies such as AT&T, T-Mobile, Lucent, NCR, HP and Microsoft
Certified Lean Six Sigma Master Black Belt and senior member of American Society for Quality.
Master’s of Science degree in Electrical and Computer Engineering
Lean – Why and How?
Copyright © Ceptara Corp. | LEAN – Why and How | Printed on: 21 October 2014 | Slide 6
Introduction
• Lean is a Continuous
Improvement (CI) approach.
• Why is it important to embrace
Lean (CI) thinking?
• How does Lean work?
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Lean – Why and How?
Copyright © Ceptara Corp. | LEAN – Why and How | Printed on: 21 October 2014 | Slide 7
What is Continuous Improvement?
• Continual improvement is an ongoing effort to improve
products, or services by focusing on why they are
provided and how they are produced.
• CI is a philosophy – a “way of thinking”.
• CI is an approach with many toolsets
including Lean, Six Sigma and Theory of
Constraints – a disciplined and systematic
method.
• CI requires mastery – requiring
investment in skill development to a “way
of thinking and doing things” to produce
the best possible outcomes
Lean – Why and How?
Copyright © Ceptara Corp. | LEAN – Why and How | Printed on: 21 October 2014 | Slide 8
CI Philosophy – “Way of Thinking”
• Strategies are based on a fundamental focus on the “system”.
• Attitude is founded in “self-critical” thinking – never being satisfied.
• Decisions are based on facts and data.
• Processes produce the right result the first time.
• All ‘change’ starts and ends with people.
• Failure must be an option to be a learning organization.
Philosophy is the
study of general and
fundamental
problems, such as
reality, knowledge,
and existence, and is
distinguished by its
systematic approach
and reliance on
rational argument
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Lean – Why and How?
Copyright © Ceptara Corp. | LEAN – Why and How | Printed on: 21 October 2014 | Slide 9
Improvement Approaches
• Lean
Eliminate Waste
Maximize Flow
• Six Sigma
Reduce Variation
Increase Predictability
• Theory of Constraints (TOC)
Exploit Constraints
Optimize Through-PutLean
Six Sigma
TOC
Lean – Why and How?
Copyright © Ceptara Corp. | LEAN – Why and How | Printed on: 21 October 2014 | Slide 10
CI Mastery – Practice Excellence
• Lean Six Sigma
Yellow, Green, Black and Master Black
Belt Certification
www.asq.org/cert/right-for-you
• Lean
Bronze, Silver, and Gold Certification
www.sme.org/lean-certification.aspx
• TOC
Practitioners, Implementers, and
Academics
www.tocico.org/?page=Certification
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Lean – Why and How?
Copyright © Ceptara Corp. | LEAN – Why and How | Printed on: 21 October 2014 | Slide 11
Why is Continuous Improvement important?
• Can a CI mindset help us
(me) be more successful?
• Can it help us respond
more quickly?
• Can it help us better meet
our customer’s
expectations?
• Can it ‘smooth out’
inevitable unforeseen
circumstances?
Lean – Why and How?
Copyright © Ceptara Corp. | LEAN – Why and How | Printed on: 21 October 2014 | Slide 12
Organizational Challenges
Could an ‘excellent’ organization have
avoided the ‘Great Recession’?
• From 2003 to 2008 the U.S. added ~40k companies (establishments) per year
• In 2008 and 2009, the U.S. lost ~130k companies per yearSource: Bureau of Labor Statistics,
http://www.bls.gov/bdm/bdmind.htm#TOTAL
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Lean – Why and How?
Copyright © Ceptara Corp. | LEAN – Why and How | Printed on: 21 October 2014 | Slide 13
Some Large Companies…
2007 to 2011
Revenues
~2 Years ~ 2 Years
~ 3 Years
Lean – Why and How?
Copyright © Ceptara Corp. | LEAN – Why and How | Printed on: 21 October 2014 | Slide 14
Some Large Companies…
2007 to 2011
Revenues
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Lean – Why and How?
Copyright © Ceptara Corp. | LEAN – Why and How | Printed on: 21 October 2014 | Slide 15
An ‘Excellent’ Organization
• MESA – a manufacturer
of products that prevent
metal structures from
corroding
Honored as a
Presidential role model
for the Malcom Baldrige
Award in 2006
Received Small
Business Baldrige award
in 2012.
Lean – Why and How?
Copyright © Ceptara Corp. | LEAN – Why and How | Printed on: 21 October 2014 | Slide 16
City of Irving Texas
• 2012 Baldrige Winner
13th most populous city in TX.
217,700 residents.
Occupies 68 square miles including
DFW Airport.
Core Services
• Law Enforcement
• Fire Protection
• Water and Sewer
• Refuse Collection
• Street and Traffic Management
• Parks, Libraries, Recreation Programs
• Capital Improvements
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Lean – Why and How?
Copyright © Ceptara Corp. | LEAN – Why and How | Printed on: 21 October 2014 | Slide 17
Irving TX compared to Bellevue WA
Bellevue shows greater volatility
(23.31 average index change) than
Irving (11.83 index change) in the net
difference from one year to the next.
Bellevue shows greater volatility (23%
average change) than Irving (15%
average change) in the net
unemployment rate change.
Irving Bellevue
Mean 11.83 23.31
Std Dev 9.68 8.93
Irving Bellevue
Mean 15.0% 23.0%
Std Dev 19.1% 27.5%
Lean – Why and How?
Copyright © Ceptara Corp. | LEAN – Why and How | Printed on: 21 October 2014 | Slide 18
Irving Key Strategic Focuses
• A Lone Star Model of Fiscal Achievement
• Citizen Feedback a Priority
• Collaborative Team Culture
• Strategic Planning &
Process Efficiency
• Safe and Green
Photo courtesy of City of Irving, Texas via the
Baldrige website.
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Lean – Why and How?
Copyright © Ceptara Corp. | LEAN – Why and How | Printed on: 21 October 2014 | Slide 19
5S Video in Erving, Texas
Lean – Why and How?
Copyright © Ceptara Corp. | LEAN – Why and How | Printed on: 21 October 2014 | Slide 20
Why is Continuous Improvement Important?
• Can a CI mindset help us (me) be more successful? Mesa’s revenue curve variation.
• Can it help us respond more quickly? Irving’s first call resolution has gone from 50% to over 90% in 2012.
• Can it help us better meet our customer’s expectations? Irving’s Citizen Service Rating significantly higher than the state,
county and US averages.
• Can it ‘smooth out’ inevitable unforeseen circumstances? Irving’s Unemployment rate change.
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Lean – Why and How?
Copyright © Ceptara Corp. | LEAN – Why and How | Printed on: 21 October 2014 | Slide 21
How Does Lean Work?
• Lean Philosophy
• How To Approach
• Seven Habits
Lean – Why and How?
Copyright © Ceptara Corp. | LEAN – Why and How | Printed on: 21 October 2014 | Slide 22
LEAN Heritage
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Lean – Why and How?
Copyright © Ceptara Corp. | LEAN – Why and How | Printed on: 21 October 2014 | Slide 23
Toyota Way – 14 PrinciplesI. Long Term Philosophy
1. Base your management decisions on a
long-term philosophy, even at the expense
of short-term financial goals.
II. Right Processes Produce Right
Results
2. Create a continuous process flow to bring
problems to the surface.
3. Use “pull” systems to avoid overproduction.
4. Level out the workload (heijunka). (Work
like the tortoise, not the hare).
5. Build a culture of stopping to fix problems,
to get quality right the first time.
6. Standardized tasks and processes are the
foundation for continuous improvement and
employee empowerment.
7. Use visual control so no problems are
hidden.
8. Use only reliable, thoroughly tested
technology that serves your people and
processes.
III. Add Value to the Organization by
Developing Your People
9. Grow leaders who thoroughly understand
the work, live the philosophy, and teach it to
others.
10. Develop exceptional people and teams who
follow your company’s philosophy.
11. Respect your extended network of partners
and suppliers by challenging them and
helping them improve.
IV. Continuously Solving Root
Problems Drives Organizational
Learning
12. Go and see for yourself to thoroughly
understand the situation (genchi genbutsu).
13. Make decisions slowly by consensus,
thoroughly considering all options;
implement decisions rapidly (nemawashi).
14. Be a learning organization through
relentless reflection (hansei) and
continuous improvement (kaizen).
Lean – Why and How?
Copyright © Ceptara Corp. | LEAN – Why and How | Printed on: 21 October 2014 | Slide 24
The four rules of TPS:
1. All work is highly specified in its
content, sequence, timing and
outcome.
2. Each worker knows who provides
what to him/her and when.
3. Every product and service flows
along a simple, specified path.
4. Any improvement to processes,
worker/machine connections or flow
path must be made in concert with
the scientific method, under the
guidance of a teacher, at the lowest
level possible.
TPS Analysis – Spear & Bowen
Harvard Business Review, Sept/Oct 1999
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Lean – Why and How?
Copyright © Ceptara Corp. | LEAN – Why and How | Printed on: 21 October 2014 | Slide 25
Building an Excellent Organization
Method Tools
Lean – Why and How?
Copyright © Ceptara Corp. | LEAN – Why and How | Printed on: 21 October 2014 | Slide 26
Lean Six Sigma Approaches & Tools
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Lean – Why and How?
Copyright © Ceptara Corp. | LEAN – Why and How | Printed on: 21 October 2014 | Slide 27
7 Habits of Highly Effective Organizations
1. Consider the System
2. Provide Leadership
3. Align to a Plan
4. Think Scientifically
5. Be Inclusiveness
6. Build the People
7. Communicate
Lean – Why and How?
Copyright © Ceptara Corp. | LEAN – Why and How | Printed on: 21 October 2014 | Slide 28
Consider the System
• Organization is a System Process Based
Fight Local Optima (no silos)
Incent People to the System
• Values Based Philosophy• Foundation for Decision Making
• Must be an overall business philosophy
• Proactive Context What does the customer or business need?
• Culture of Accountability System wide commitment
Willingness to hold each other accountable
Reward Accountability
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Lean – Why and How?
Copyright © Ceptara Corp. | LEAN – Why and How | Printed on: 21 October 2014 | Slide 29
Provide Leadership
• Clear & Compelling Vision
Inclusive vision and mission.
It must be personal.
Visual, Visual, Visual.
• Advocacy
Lead by Example
Empower
Create Momentum
Covey’s 4 Roles of Leadership
Lean – Why and How?
Copyright © Ceptara Corp. | LEAN – Why and How | Printed on: 21 October 2014 | Slide 30
Align to a Plan
• Systematic Strategic Planning
Establish your Rhythm
Informed & Inclusive Planning
Drive Clarity
• Hoshin Kanri
Clear concise goals drive to projects
Project Charters are clear
(no scope creep)
• Aligned KPIs
Metrics drive behavior
(good or bad)
Hawthorne EffectCity of Irving Strategic Planning Process
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Lean – Why and How?
Copyright © Ceptara Corp. | LEAN – Why and How | Printed on: 21 October 2014 | Slide 31
Scientific Thinking
• Clear Problem Statements
No “Lack of a Solution” problems
• Do the Research
Facts and data based decision making
Collect what you know
Measure if missing
Find the root causes
• Solutions should fix the problem.
Solve the root cause not the symptom
No “jumping to conclusions”
• Experiment to Achieve Right Result
Make sure the problem is fixed.
Lean – Why and How?
Copyright © Ceptara Corp. | LEAN – Why and How | Printed on: 21 October 2014 | Slide 32
Be Inclusiveness
1. Leadership
2. Management
3. Employees
4. Customers
5. Suppliers
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Lean – Why and How?
Copyright © Ceptara Corp. | LEAN – Why and How | Printed on: 21 October 2014 | Slide 33
Build the People
• Skills Development More than tools – tools for a reason.
Soft skills are ‘skills’ too.
Don’t solely rely on the Black Belts / Sensei
• Embed in the System Reward employees for skill acquisition
Encourage mentoring
Provide ways for sharing and teaching
• Learn Promote ‘self-critical’ thinking.
Promote Improvement Kata.
Failure must be an option to promote learning.
Lean – Why and How?
Copyright © Ceptara Corp. | LEAN – Why and How | Printed on: 21 October 2014 | Slide 34
Clear & Frequent Communication
• Create a Brand
• Audience, Message, Vehicle
• Visual, Visual, Visual
• Build Excellence via Small Wins
• Show Quantitative Results
• Transfer the Knowledge
• Create Communities
• Reward Progress
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Lean – Why and How?
Copyright © Ceptara Corp. | LEAN – Why and How | Printed on: 21 October 2014 | Slide 35
Conclusion
• Why is Lean Important? Focuses on the Customer
Reduces Chaos
Builds Stronger Teams
Delivers value to the organization.
• How Does it Work? System Based
Values Driven
Disciplined Approach
Inclusive
Results Focused
Lean – Why and How?
Copyright © Ceptara Corp. | LEAN – Why and How | Printed on: 21 October 2014 | Slide 36
LEAN WHY & HOW?Why is Lean important & how does it work?
Chris Lindstrom, Ceptara Corp.
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